IMF raises Asia’s growth forecast from 4.8% to 5.5%

The International Monetary Fund has raised its 2009 growth forecast for Asia’s developing economies from 4.8 percent to 5.5 percent but cautioned that a sustained rebound will depend on recovery in developed economies.

The Washington-based cited improved prospects for regional giants China and India. In a report Wednesday, it raised its 2009 growth outlook for China by one percentage point to 7.5 percent and for India by 0.9 percentage points to 5.4 percent.

“The upgrade owes to improved prospects in China and India, in part reflecting substantial macroeconomic stimulus, and a faster-than-expected turnaround in capital flows,” the IMF said in a report on global growth. “However, the recent acceleration in growth is likely to peter out unless there is a recovery in advanced economies.”

The announcement follows the World Bank’s decision last month to raise its growth forecast for China from 6.5 percent to 7.2 percent due to its stimulus-driven investment boom.

The IMF raised its 2010 growth projection for developing Asian economies from 6.1 percent to 7 percent.

Source: Reuters